UK build-to-rent sector: property investment made for modern living

 

The build-to-rent sector has become well established across the UK as this kind of investment continues to thrive. What makes build-to-rent so attractive for both landlords and tenants?

In recent years, the build-to-rent sector has seen significant growth in the UK. The sector is providing a solution to the increasing demand for high-quality rental properties that better reflect the needs of modern tenants.

The sector has remained particularly resilient throughout the COVID-19 pandemic as build-to-rent has become alluring for both landlords and tenants. New research from Savills reveals what tenants are looking for in build-to-rent and the investment and development currently happening in the sector.

What are tenants looking for?

The majority of build-to-rent households are between 26 and 40 years old. Core and secondary cities attract slightly younger renters with over half aged under 30 years old. Co-sharing is also more common in the UK’s core cities and London.

This impacts what tenants are looking for in a rental’s layout and the amenities on offer within the development. Extra workspace is important to consider for young professional co-sharers. This will be especially important with the recent rise in remote working.

Build-to-rent can offer tenants more than traditional buy-to-let properties. Many of these developments come with attractive amenities, such as gyms, cinemas and co-working spaces. Additionally, these homes have more of a focus on shared spaces and a strong community feel.

The predominant demographic in areas outside of the capital are what is considered “central pulse” households. Savills says this means these tenants “value convenience and favour apartments in vibrant locations that place them close to both their jobs and nightlife”.

This will likely make this kind of purpose-built accommodation particularly appealing as lockdown restrictions are lifting. City centre living is increasing in demand as many renters are moving back to urban areas as more professionals and businesses are returning to the office and as more socialising is allowed.

Investment in build-to-rent

With the number of people living in privately rented properties continuing to rise, in addition to age of those renters, the build-to-rent industry is largely adapting to the changing trends. Investment has been increasing in the sector, even throughout coronavirus.

Throughout 2020, there was record investment in the sector. And during the first quarter of 2021, more than £1.23bn was invested in UK build-to-rent developments. This fast start to the year is the highest amount of investment for any first quarter on record. This strong investment will likely continue throughout the rest of of 2021.

Developments in the sector

The UK build-to-rent stock includes 57,700 completed homes. An additional 36,000 homes are currently under construction. And 94,700 homes are in the future pipeline, including those at the pre-application stage. This would bring the total size of the sector to 188,500 units.

Throughout the past year, the number of homes with consent increased by 27% to 45,000 homes. In Q1 2021, 25 schemes with capacity of 7,000 homes obtained full planning permission in the UK. This amounts to the highest number of full planning permissions gained in a single quarter.

Over the past 12 months, 10,600 homes completed. This figure is in line with the three-year average for the UK. However, new starts aren’t keeping pace with completions. This has led to a contraction in the construction pipeline, which is a trend also seen across the residential development sector due to the COVID-19 pandemic and current economic landscape.

Once the economic picture improves, Savills projects that new starts will increase again and the construction pipeline will start growing, especially with the number of recently consented projects. Additional investment will likely come to the growing build-to-rent sector throughout the coming years.

At BuyAssociation, we offer a number of build-to-rent investment opportunities. Sign up for early access to our deals, and get in touch for additional information.

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000

South Central – Birmingham City Centre Apartments

Highly anticipated 28 storey launch in Birmingham City Centre with an impressive roof garden and communal facilities.

  • 154 units across 28 storeys
  • Residential multi-media community room, gym, roof garden and sky cinema
  • Excellent future connectivity via the metro system to other key transport hubs and locations around the city

from £205,800

ba-

Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator

.

Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.

Login

Not a member? Sign up for free

build-to-rent

UK build-to-rent sector: property investment made for modern living

Example

By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.